The Government is still trapped in the labyrinth of tariff segmentation

The government seems to be caught up in a labyrinth around the segmentation of rates. The idea of ​​the Minister of Economy, Martín Guzmán, is eliminate subsidies to the 10% of the population with the highest incomes. He wants them to pay the “full amount” of electricity and gas bills, without subsidies from the national State.

Two weeks ago, there was three public hearings The first is for increasing gas. It came out on Friday and it will be 20%. The second, for the increase of power. It also happened on Friday and will be about 16.5% (less than announced by the Government, which is between 20% and 22%). The third audience is to talk about segmentation. This proposal still seems far from being implemented.

Even within albertism — where Guzmán is a banner supported by President Alberto Fernández — they understand that segmentation brings “trouble”. They can break principles of equality before the lawsay their legal swords. “It’s very judcializable”, criticizes Kirchnerism. “At least two months to implement it ”announce the distributors of electricity and gas.

Both former and current officials in the energy area say that the Economy can’t find turn mechanism. The undersecretary of Energy Planning, Andrés López Osornio, prepared a scheme. There it was established that subsidies were removed from the occupants high -income areasa concept he inherited from the previous work of the Undersecretary of Electric Power, under the leadership of Federico Basualdo) and added households that had revenue of $ 314,000, equivalent to 3.5 main baskets.

But that number ($ 314,000) he is old. The new Income floor is for salaries of $ 280,000 per month. Those with higher incomes -unions such as trucks, tankers, oil workers- they will pay that tax and, in addition, they will be subject to “segmentation”, that is, the elimination of subsidies on electricity and gas bills.

Guzmán said he would delegate the case of Darío Martínez, the Secretary of Energy. The Neuquén official is toggling between carrying out the orders of his boss (the Minister of Economy) and his allegiance to Kirchnerism, resisting more rate increases. Segmentation will not apply in June, which is the date originally planned. The Government’s new goal is between August and September.

The minister made a commitment to the IMF to reduce energy subsidies, that is represents 2.3% of GDP (over US $ 11,000 million in 2021). But that was before Russia invaded Ukraine. Prices of energy commodities rose, and electricity and gas bills began to rise around the world. In Spain, Italy, United Kingdom, for example, electricity bills have doubled and the list of countries with this problem continues. The Government understands that it cannot take that course. It is not known whether the IMF will be able to be flexible in meeting this goal of the local Executive Power.

The majority of energy subsidies are concentrated in the winter. which where the State bears the higher cost of gas and electricity. A “segmentation” (or elimination of subsidies) for September will not lead to significant savings on that item.

It has been more than a year since Guzmán wanted Basuldo to resign. But the undersecretary, with the support of Cristina Fernández de Kirchner, La Cámpora and the Instituto Patria, continued her post. It’s more, He came out strong in the eyes of Christianity. He was the first to stand as head of the Economy, before the minister was showered with criticism from the coalition government space, something that became consistent from the misunderstanding with the International Monetary Fund (IMF).

The dispute between Guzmán and Kirchner officials from the Ministry of Energy (led by Basuldo) over electricity and gas rates has not stopped. Guzmán wants two increases (for electricity and gas) and “segmentation” to remove subsidies from higher -income sectors. Basuldo proposed a single increase, and although he rejected segmentation, he drafted it.

Governors don’t want to hear about “targeting.” They want this mechanism to be limited to Buenos Aires. Even the Government identified 920,000 households in the segmentthere are no guidelines on how to proceed.

Basuldo agreed to move forward with increasing electricity and gas (by 20%, in March), but only once a year. Guzmán saw that the scheme was inadequate, and launched a second increase – by another 20% – in both services. Basuldo disagreed, considering it “inflationary.” Close to Kirchnerism, they introduced him that he would “block” those increases. On Friday, the two contacted the Energy Secretary.

Next week, the Government will raise gas rates by 20% and electricity by 17%. Guzmán could be satisfied (he got his two raises) or dissatisfied (he still didn’t get the segmentation). On the other hand, Basualdo saw that the segmentation was not progressing – Guzmán removed that work from him – and the second brightness increase was lower than expected. “They made the pattern of the second increase more flexible,” they understand from Kirchnerism.

The power increase (16.51%) was lower than originally announced by Guzmán. This increase shall be applied by each distributor of the province, with the consent of its regulatory entity. In Buenos Aires, it will be the responsibility of Enre, which is in the jurisdiction of Edesur and Edenor.